ALTHOUGH the vibrant economy of the Philippines is attracting increasing numbers of foreign nationals to visit and consider setting up businesses or permanent residence, Philippine law still strictly limits the ownership of property by non-Filipino citizens.
While easing some of the restrictions is occasionally debated, there is at present no significant action being taken to open the property market up to more investors and would-be residents from other countries. Here is a quick guide to the current laws regulating foreign real estate ownership.
A foreign national can own a condo unit or townhouse in the Philippines by establishing a corporation for the purpose, which must have no more than 40 percent foreign equity and is formed by “natural persons” of legal age – in other words, people who actually exist – at least 60 percent of whom must be Filipino citizens.
Under that sort of corporate arrangement, a foreign national can own up to 40 percent of the units of a condominium project, according to Republic Act (RA) 4726, also know as the Condominium Act.
Another alternative for foreign buyers is to purchase a house, and lease the land where it is located. Under the law, the initial lease can have a term of 25 years, and can be renewed once for another 25 years.
A foreign national married to a Filipino citizen can purchase a property jointly with his or her spouse, but only the name of the Filipino spouse will be on the property title. However, the foreign spouse does have a few rights in terms of disposing the property if the Filipino spouse dies. He or she can either sell the property for a profit, or pass ownership to the children of the couple, or to the family of the Filipino spouse.
For Filipinos who have lost their Philippine citizenship or for Philippine citizens who also are naturalized citizens of another country, there are only a few restrictions. A natural-born Filipino who has lost Philippine citizenship can still own up to a maximum area of 1,000 square meters of residential urban land, or up to 1 hectare of rural land as long as it will be used for residential purposes. In the case of married couples, the total combined area of their property must not exceed these limits.
A natural-born Philippine citizen who has become a naturalized citizen of another country can own real estate just like any other Filipino citizen, but must first apply for Dual Citizenship under Republic Act 9225.